UK Housing Market Faces Uncertainty as Iran War Impacts Buyer Confidence

The ongoing conflict in Iran is having a significant impact on the UK housing market, with sellers facing a challenging time as buyer confidence dwindles. In Canterbury, the typically bustling spring selling season has been marred by uncertainty, with lenders pulling hundreds of mortgage products and replacing them with more expensive deals.

According to Andy Wicking, director of the Charles Bainbridge estate agency, the mood is one of "fear and uncertainty". Wicking notes that in the first three months of the year, only 47% of homeowners who asked for valuations went on to list their properties, a significant drop from the 68% in the same period last year.

First-Time Buyers Affected

First-time buyers, who typically have smaller deposits and less experience navigating a turbulent market, are being particularly cautious. Wicking explains that "the chains falling down at the lower end, they're the really cautious ones... and funnily enough, they're the ones that the market really, really needs".

For those who do make it to market, prices are slumping. Wicking says that sellers could expect bidding wars just a few months ago, but now a house valued at £600,000 may be listed at £575,000 to attract buyers. Surveyors are also increasingly down-valuing properties, making it essential for sellers to price their homes competitively.

A City in Flux

Canterbury, with its unique blend of Victorian terraces, Georgian townhouses, and Tudor timber frames, has long been an attractive destination for buyers. The city's mix of longstanding locals and London leavers, who arrived after the pandemic in search of more space for their money, has created a diverse community. However, the current market uncertainty is affecting even the most desirable properties.

Martin Short, who has been trying to sell his converted Georgian pub in Bekesbourne, just outside Canterbury, has seen viewings "drop through the floor" since the Iran war began. Despite his agents pushing for another price reduction, Short is refusing, citing the lack of buyers as the main issue.

National Trends

Nationally, property prices fell by 0.5% in March, according to Halifax, with the average price of a home now standing at £299,677. Brian Swint, an independent mortgage broker, notes that the anxiety in the market is likely misplaced, but the fear of rising interest rates is causing buyers to hesitate.

With nearly a million homeowners due to come off five-year fixed deals this year, the timing of the conflict could not be worse. As Swint explains, "the timing couldn't be worse for a huge energy shock – now is when people are really getting serious about moving".

While a two-week ceasefire in Iran has brought some relief, mortgage experts caution that rates are unlikely to fall quickly, and the volatility of the conflict could hammer markets again. In Canterbury, Wicking remains optimistic, seeing the uncertainty as an opportunity for buyers to negotiate better deals. However, for sellers like Short, the situation is more bleak: "You're dominated by what's happening the other side of the world. The opportunities are getting less. I do feel powerless."